But there is not really any kind of “cliff” in the sense that if you stepped
over the edge, you would fall fast, land on something hard, and not get up for a
long time. In the modern US economy, the scheduled changes constitute more of a
fiscal “slope” – meaning that the full effect of the tax increases would not be
felt immediately (income withholding takes time to adjust), while the spending
cuts would also be phased in (the government has some discretion regarding
implementation). This slope offers President Barack Obama a real opportunity to
restore the federal government’s revenue base to what it was in the mid-1990’s.

The choice of words to describe America’s fiscal situation matters, given the
hysteria that has been whipped up in recent months, primarily by people who want
to make big cuts in the country’s two main entitlement programs, Social Security
and Medicare. Their logic is that if we are about to rush off a cliff, we need
to take extreme measures. And cutting pensions and health care for the elderly
certainly qualifies as extreme – as well as completely inappropriate and
unnecessary.

If, instead, the US faces a fiscal slope, then people who refuse to consider
raising taxes – namely, Republicans in the US Congress’s House of
Representatives – have a very weak hand indeed. ...[more]...

But there is not really any kind of “cliff” in the sense that if you stepped
over the edge, you would fall fast, land on something hard, and not get up for a
long time. In the modern US economy, the scheduled changes constitute more of a
fiscal “slope” – meaning that the full effect of the tax increases would not be
felt immediately (income withholding takes time to adjust), while the spending
cuts would also be phased in (the government has some discretion regarding
implementation). This slope offers President Barack Obama a real opportunity to
restore the federal government’s revenue base to what it was in the mid-1990’s.

The choice of words to describe America’s fiscal situation matters, given the
hysteria that has been whipped up in recent months, primarily by people who want
to make big cuts in the country’s two main entitlement programs, Social Security
and Medicare. Their logic is that if we are about to rush off a cliff, we need
to take extreme measures. And cutting pensions and health care for the elderly
certainly qualifies as extreme – as well as completely inappropriate and
unnecessary.

If, instead, the US faces a fiscal slope, then people who refuse to consider
raising taxes – namely, Republicans in the US Congress’s House of
Representatives – have a very weak hand indeed. ...[more]...